ARMENIA Law and Practice Contributed by: Hayk Hovhannisyan and Suren Sloyan, HAP
1.3 Corporate Governance Requirements for Companies With Publicly Traded Shares Companies with publicly traded shares in Arme - nia must adhere to specific corporate govern - ance requirements to ensure transparency, accountability and protection of shareholder interests. These requirements are designed to align with international corporate governance practices and Armenian law. Corporate Governance Requirements for Publicly Traded Companies in Armenia Publicly traded companies in Armenia are pri - marily governed by the LJSC, the Law on the Securities Market and regulations set out by the Central Bank of Armenia (the “CBA” ) and the Central Depositary of Armenia. These legisla - tive provisions are intended to ensure effective governance, safeguard shareholder rights and maintain market integrity. Mandatory v Voluntary Requirements Mandatory requirements The mandatory requirements are as follows. • Compliance with the relevant laws and other legal acts. • Regular disclosure of financial statements and material events to ensure transparency. • Holding annual general meetings (AGMs) and ensuring minority shareholder rights. • Establishment of key board committees. • Conducting external audits and providing transparent financial reporting in line with regulatory standards. Voluntary requirements The voluntary requirements are as follows.
• Adherence to the Corporate Governance Code, which provides recommendations for best practices but is not legally required. • Non-binding recommendations for the com - position of the BoD (eg, the percentage of independent directors). While mandatory requirements ensure legal compliance, shareholder protection and finan - cial transparency, voluntary corporate govern - ance practices, like following the Corporate Governance Code, enhance reputation, investor trust and risk management. 2. Corporate Governance Context 2.1 Hot Topics in Corporate Governance Armenia’s corporate governance landscape is undergoing significant transformation with a pronounced emphasis on sustainability and green initiatives. Key developments include the following. National Sustainable Finance Roadmap In October 2023, the CBA introduced the Nation - al Sustainable Finance Roadmap (the “Road- map” ), underscoring a strategic commitment to sustainability within the financial sector. The Roadmap is structured around four key pillars: • mobilising sustainable finance: facilitating capital flow towards industries aligned with Armenia’s low carbon ambitions and intro - ducing innovative financial instruments such as green, blue, social, sustainability and sustainability-linked loans and bonds; • enhancing markets: establishing a Central Sustainable Finance Database and designing frameworks to monitor progress in sustain - able finance initiatives;
16
CHAMBERS.COM
Powered by FlippingBook